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Since the thread got locked, I'd like to throw in my 2 cents.

GW can't offer discounts, or a large scale discount program. They make the stuff...by discounting it and undercutting the price of what FLGS can sell it for would make it a monoply of sorts, which is illegal. And if you say they should cut prices, the answer back is, why should they? They are making a profit, and the company is growing, not shrinking.

I used to have a WaldenBooks card. They made me jump through hoops to get free stuff. This is no different.....I agree the reward is paltry, but it is still something for someone who is going to get the stuff anyway.

Finally....how would YOU feel if your boss came in and said, "Johnson, can we have a discount on your salary for the next couple of years? Say 20%? Thanks." Would you go for it?

 

The Problem is: GW is already undercutting the FLGS as soon as they see their product flying of the shelf in the sayed FLGS. They HAVE a monopoly and they have no reservations about doing it.

Posted By General Hobbs on 01/28/2007 7:44 PM

And if you say they should cut prices, the answer back is, why should they?

Because they're steadily losing sales and hemmorhaging market share?

But they probably have their reasons for not lowering prices.  It could be that lowering prices could cause purchases to decrease as people might hold off on buying stuff in anticipation for further price drops.  The most they would do is hold of on any future price hikes for a LONG time.  Of course it has yet to be seen whether that will actually happen.

 

Losing sales....yet the company is still making a profit, and expanding.  Remember, slow and steady wins the race.

Eh...did you look at their last financials?

Hobbs is still in the fantasy land that GW is doing great, everything is fine and there is no cause to be alarmed. Three years of massive drops in revenue is normal! It's "reverse growth!" Oh, and don't mind us as we take loans to pay out dividends, we wouldn't want to hurt our profits now wouldn't we?

Slow and steady does win the race.
When you take millions of pound sterling out in loans to maintain dividends to appease shareholder that your business isnt doing so well, that does not indicate a slow and steady growth. More like a shaky and tenuous grasp on the business. Revenue is down almost 2.5 million GPS while gross profit is maintained at half a million GPS.

The water is still pouring out of the cistern, filling everyones cup. But there is very little rain filling that cistern. The rainfall doesnt equal the output from the spigot. Unless some clouds form in the sky, the cistern is sure to dry up.

And Gary Morely peed in the cistern.  Ew.

Posted By General Hobbs on 01/28/2007 7:44 PM

 GW can't offer discounts, or a large scale discount program. They make the stuff...by discounting it and undercutting the price of what FLGS can sell it for would make it a monoply of sorts, which is illegal. And if you say they should cut prices, the answer back is, why should they? They are making a profit, and the company is growing, not shrinking.

Finally....how would YOU feel if your boss came in and said, "Johnson, can we have a discount on your salary for the next couple of years? Say 20%? Thanks." Would you go for it?

 

First, your analogies are poor and don't fit the situation.  Ther is not a legitimate nor valid reason why GW can't offer discounts.  GW, like any manufacturer, informs the retails stores of the MSRP (manufacturers suggested retail price), which the FLGS does or does not have to follow.  GW does not have to follow that either.  In fact, if they wanted to, they could sell their product for cost and completely hamstring the FLGS's.  But they don't, because thats bad business, and think about the distro problems they would have.

Its also not a monopoly because there are plenty of other miniature manufacturers that offer similar products, similar paint lines, similar everything.  Unless GW made it impossible for those companies to sell their products, than they are not a monopoly.  And when I meand "make it impossible" I don't mean by undercutting the competition, as that should only cause a price war.  Sure, does GW do better than most other mini companies... yes. But Coke outsells Pepsi, GM outsells Toyota and Ford (for now), Cable outsells Satellite, PCs outself Macs.  Now if these companies act in nefarious ways to ensure that distributors don't sell their competitions goods, flood the market with low cost goods (ie massive distribution of cheap products), or buy out the competition, so that there is no competition, then THAT is acting like a monopoly  (sound like Ma Bell, anyone?)

And for GW NOT to do discounts is silly.  Why?  Look at all the industries I've talked about. They all do incentives.  GM and Ford dropped the prices of their vehicles after they got hammered in the market, and its CORPORATE GM and Ford that establish incentive packages, not always the retailers.  GW could also reduce the MSRP quite easily.  They would account for this by reducing their overall cost of their products to distributors and FLGSs.

So WHY should GW reduce their prices?  Good business.  If demand is down, don't increase prices, reduce them to raise demand.  In the long-run the company would do better by increasing the number of products they sell.

Lastly... why is it that many many many FLGSs sell GW products for 10-20% off?  Is it because they feel sorry for us?  No, it simply good business.  They know that the $1-2 they lose in profits will be made up for in the massive amount of goods they move.  In the long run they win.  Who are you more willing to buy from, someone who sells you a mini at $10 or someone that sells that mini at $8?  Lets look at simple numbers. The guy selling the $10 mini would make $80 by selling 8 minis.  The guy selling $8 minis would have to sell 10 minis... BUT he's banking on selling more products in the long-haul, meaning greater profit over time in comparison to the other guy.  Its smart business.

Now if GW cut their mini costs 10% and passed that along to the customer, it would generate more business because people would have more money to spend on GW products.  GW would win in the long haul.

Basic economics.

-Jmz

You are incorrect on several points.

You can only use GW mini's to play GW games at GW stores and events. If they undercut the prices and offered discounts and took sales away, then it would be shady.

If you can sell less product and make the same amount of money for less effort then why work harder?

Lowering prices invites the "fad" aspect, which kills sales in the long run.

GW does do incentives every so often. Right now the Call to Arms program. Its not much, but it is something.

 

Right now demand is not down....the company posted a profit and is expanding. Sales are up. No reason to change.

Growth is the ONLY way for GW to continue their business, much less expand it. My existing minis, unlike my car, do not decay with time (well, not appreciably). There is little "repeat" business for GW - they won't be selling me the same miniature twice. (Codexii, on the other hand...)

If you want your business to continue, and your business involves selling non-decaying products, you must maintain growth.



Go back and reread the financials and analysis. If you want to discuss a GROWING company, the relevant number isn't profit; it's revenue. Revenues are declining, because volume of business is declining. Given the price increases (which serve to partially offset the decreasing volume), volume of business is rapidly declining.

I never thought I'd say this.

Lawyers rule.

Janthkin, you live pretty close to where I do. What games do you play, and are you going to make it to Kublacon or Dundracon?

Chuck

Janthkin has it right.

What's worse for GW is not even that revenue (customers) has disappeared. There are as many , or more, people in the hobby now as there ever was. Customers are now finding viable alternatives to GW. We can complain about the price increases and such as much as we want. What should be really startling is that GW is resoundingly getting its butt handed to it by the competition.

GW is now in clasic corporate denial. Look at the U.S auto industries response to small foreign imports in the 80's..."nothing wrong here...all is well." GW is doing "business as usual"  and haven't realized the ball game has changed dramaticaly in the last two years.

ender502

Posted By Duncan_Idaho on 01/29/2007 12:04 AM
The Problem is: GW is already undercutting the FLGS as soon as they see their product flying of the shelf in the sayed FLGS. They HAVE a monopoly and they have no reservations about doing it.

I'm not quite sure what you mean't to say here, but can you explain it a bit further? I own a couple of game stores, and I don't feel GW undercuts me at all. If anything, I have the ability to undercut them, as I can have a sale when I want to, offer a customer a discount on a large purchase, give away a paint set to a new customer, or anything else I want to do. The GW stores don't have that freedom. It's actually been ages since GW has had a sale.

The guy selling the $10 mini would make $80 by selling 8 minis.  The guy selling $8 minis would have to sell 10 minis... BUT he's banking on selling more products in the long-haul, meaning greater profit over time in comparison to the other guy.  Its smart business.

Actually, that's a bit of bad math. What a store needs to concern itself with is profit, not gross sales. Let's make the assumption that the game store is getting product direct from GW, and gets the full 45% discount on the product, vs 35% from other distributors. A 10.00 miniature costs the store 5.50, and gives 4.50 profit, normally.

8 minis at 10.00 is 80.00 gross, and 36.00 profit.

10 minis at 8.00 is 80.00 gross, but only 25.00 profit.

14 minis at 8.00 is 112.00 gross, and 35.00 profit.

15 minis at 8.00 is 120.00 gross, and 37.50 profit, and makes the store a bit more than selling just 8 blisters at full price.

You don't discount because you make it up in volume, you discount because you want to steal the sales from the guy charging full price, or less discount than you are giving away. Stores also discount to move excess product, close out lines of stock they don't want anymore, or to undercut a competitor so that he goes out of business. The trick is having a good enough business that you can survive the discount war and not just commit double suicide.

I've often wondered what would happen about the situation where GW opens up a store near an independent retailer. Often the independent dumps their GW stock. I wonder what would happen if instead, the retailer gave did as good a job as the GW store, provided the same amount of game space, events, and carried as much stock. Then cut their price by 5%. Your customers, home field advantage, percieved underdog, and a bit of a discount. I don't think the GW store would ever be profitable.

I don't have a GW store near me, and our relationship is good enough that I doubt I ever will. So it's just idle pondering for me.)

@mikhaila

It works the same way all the time: GW finds out that the sales in a FLGS skyrocket and thinks that having all the pie is better than having half the pie. Some weeks later suddenly a GW-shop opens. They have special opening-prices and all the stuff..... down to 50% of the SRP and they have the money to do this for half a year at least. At the same time the orders of the FLGS have "unexpilcable" accidents: Sorry, but we don´t have enough minis in stock to send you! Sorry, mail must have sent your parcel the wrong way! Sorry, we lost your order in our system! etc. etc.

While the GW-shop gets the full delivery, the FLGS down the road gets fewer of what it orders or siginificantly later. They steam-rolled many shops like this in Australia to a point where it was hard to find any LGS and they also killed some shops in Europe. Fortunately there are other products now, but in the past it was really problematic since GW products made you a lot fo money.

There's a few other reasons to go this route. Psychology-wise, offering someone a "discount" can create an additional incentive to buy more than they would have otherwise (1 marine box at full price or 2 at 15% off). So having discounts can create addtional sales.

Rewards-type programs are a similar tactic - give the consumer something (significant) to work towards, and they'll often spend more at a time than they would have otherwise. But it should be a reward worth earning.

Posted By Duncan_Idaho on 01/30/2007 2:37 AM
@mikhaila

It works the same way all the time: GW finds out that the sales in a FLGS skyrocket and thinks that having all the pie is better than having half the pie. Some weeks later suddenly a GW-shop opens. They have special opening-prices and all the stuff..... down to 50% of the SRP and they have the money to do this for half a year at least. At the same time the orders of the FLGS have "unexpilcable" accidents: Sorry, but we don´t have enough minis in stock to send you! Sorry, mail must have sent your parcel the wrong way! Sorry, we lost your order in our system! etc. etc.

While the GW-shop gets the full delivery, the FLGS down the road gets fewer of what it orders or siginificantly later. They steam-rolled many shops like this in Australia to a point where it was hard to find any LGS and they also killed some shops in Europe. Fortunately there are other products now, but in the past it was really problematic since GW products made you a lot fo money.

please back this statement with fact, otherwise we will have to see it as pur congecture and abit of or my buddy lost his store cause he couldn't deal with life.. blah blah blah.  this sounds like something that might have happened 15 or so years ago, but not currently.  as you mention in the past.. get over it and get past it.. cause obviously it is clearly clouding your vision.

Well you could come over here and talk to the owner of the surviving shops how hard it was for their colleagues....

BTW what kind of facts would you accept? delivery lists? oder lists? It´s not easy to run a games store, even when you are good at it and one does not need another company that stabs one in the back as soon as they seem fit. A lot of LGS over here refrain from carrying GW stuff, just because of this nasty habit. The earn their money, but with Privateer Press, Mongoose and Rackham instead. Carrying GW has become too risky. And when the GW shop in our city closes down this summer, it will be hard to find a shop in our town that carries GW (300.000+ people living in this town). The reason the shop closes down? Boycott, since they had the idea that chasing away the veterans was an good idea, unfortunately the veterans took the newbies with them cause they founded a hobby club which had a much better service than the shop. So.... fewer left to sell to and many are one-shot-buyers.

I've seen recurrent rumors of GW doing this on this forum and elsewhere for just about the whole 8 years that I've been in the game. Opening a GW store local to and in direct competition with an established FLGS, then the FLGS starts having problems getting stock. The relationship quickly sours, the store owner doesn't want to support GW or push those products anymore, and they lose ground more and more quickly.

Some of these stories are certainly true. I've known a couple of very intelligent, capable salesmen who ran game stores and reported incidents like these. Their sales rep at GW, and the guy above him, were idiots, and did not work with the FLGS they way they should have.

Some of these stories are certainly false or exaggerated. Most game store owners I've known are NOT good salesmen or businesspeople, and are not capable of achieving the kind of success mikhaila has had. When they make bad business decisions or have a miscommunication with GW which is their own fault, they will blame it on GW when they chat with customers. 

And once you get into a bad slide in your business, no matter whose fault it is, it becomes difficult to keep well stocked just based on low cash reserves.  If you're low on stock, people shop with you less.  If they shop with you less, you can't afford as much new stock.  And it becomes a death spiral. 

I've seen three gaming stores close in southern NH in the last four years, and no new ones open.  There are multiple reasons, but I've become acutely conscious of a desire to support my local stores and spend my money there, as opposed to at online discounters, just because I really value having a local place to play other than my house.

And it's convenient to be wandering down the road and go "You know, I'd really quite like to do a spot of painting tonight, wonder if the shop has anything good?" and walk in, rather than having to order it and wait for it to come.
I don't hang out in the local games stores in dublin, but I think it's cool that they are there for me. But none of them bother stocking GW stuff anyway.

Posted By two heads talking on 01/31/2007 11:58 AM

please back this statement with fact, otherwise we will have to see it as pur congecture and abit of or my buddy lost his store cause he couldn't deal with life.. blah blah blah.  this sounds like something that might have happened 15 or so years ago, but not currently.  as you mention in the past.. get over it and get past it.. cause obviously it is clearly clouding your vision.

What? Instead of two heads talking, perhaps one of them should concentrate on putting some effort into your posts, particularly the grammar and spelling as well as avoiding such rambling knee jerk attacks.

As others have mentioned, this is not some isolated incident. In Northern VA I know of at least one shop that went out of business due to a combination of GW shafting him on his orders and possible business acumen on his part. At least two other stores aren't in good shape, while my old LFGS battled for years with terrible GW reps, misplaced/forgotten orders, stealth increases on purchase orders, etc... all which started when one, then two GW Hobby Centers opened up within five-ten miles of his location. If it wasn't for a dedicated group of hobbyists that ordered through him being one of the first stores in the region to fully embrace Flames of War, he might have gone out of business. Instead, he recently moved into a much larger retail location that both has more space for stock as well as a larger, better equipped gaming area replete with GF9 tables. GW? Had nothing to do with his success and still botches his orders.

Posted By General Hobbs on 01/29/2007 1:57 PM
You can only use GW mini's to play GW games at GW stores and events.

So?

To play anywhere else (as the vast majority of players do) you can use whatever miniatures you want, in whatever games you want.*

While I don't have any figures to back it up, I'd be willing to bet that games played in GW stores, or at GW sponsored events, actually make up a trifling proportion of the overall 'GW hobby'




*Edit: Generally not including other gaming events sponsored by other games companies, of course...

Posted By Duncan_Idaho on 01/30/2007 2:37 AM
@mikhaila

It works the same way all the time: GW finds out that the sales in a FLGS skyrocket and thinks that having all the pie is better than having half the pie. Some weeks later suddenly a GW-shop opens. They have special opening-prices and all the stuff..... down to 50% of the SRP and they have the money to do this for half a year at least. At the same time the orders of the FLGS have "unexpilcable" accidents: Sorry, but we don´t have enough minis in stock to send you! Sorry, mail must have sent your parcel the wrong way! Sorry, we lost your order in our system! etc. etc.

While the GW-shop gets the full delivery, the FLGS down the road gets fewer of what it orders or siginificantly later. They steam-rolled many shops like this in Australia to a point where it was hard to find any LGS and they also killed some shops in Europe. Fortunately there are other products now, but in the past it was really problematic since GW products made you a lot fo money.

Yeah, I hear this all the time, on the internet. It's repeated over and over and over. Might have happened, might not have. I wonder though, what this 50% off thing is? A sale? Don't we have thread after thread complaining about a lack of sales? Or are we talking years ago on this.Or in the UK?

I haven't seen GW do this yet. I have seen a lot of retailers blame GW for their own stupidity. I know two ex-retailers that blamed GW for their not getting shipments, because they were too embarrassed to admit they didn't have money to place them, and had bounced checks to GW. That part never gets mentioned, just that "GW is screwing me because they won't ship to me when I don't pay my bills."

Maybe they have popped in stores near retailers, and I'm not aware of it. I'm sceptical though,based on personal experience. I know my shop is in the top 4 accounts on the East Coast of the US. GW has had years to put something near me, I've been here for19 years now. No GW store.

In the US, the part of GW that deals with independents is totally different people than the ones that run the company stores. How do you think it works, this screwing up of a shops orders?

EvilGWguy: umm, Joe is it? Joe, do you handle Showcase Comics in Philadelphia?

Joe: Yeah, just placed a big order for them.

EvilGWguy: Well, do me a favor and just lose half of it. We're putting in a GW store near him, got to make him look bad.

Joe: Well, it's kind of hard, I hit the 'Send' button, and the order is now 1200 miles away in Memphis,and getting picked.

EvilGWguy: hmm, can you call the warehouse, talk to a few people, and mess it up?

Joe: I could try, but the warehouse is run by the UK, not the US, we don't control anything.

EvilGWguy: Ok, then, mess up his next order.

Joe: Can I have that in writing? I mean, it doesn't show up, I get yelled at, he calls my boss, I get yelled at again, and I get raises based on how much I sell. So since your GW store doing good means nothing to me, and I've dealt with the account for years, I kind of need a reason, and some written orders.

EvilGWguy: Sure, I'll write out a form 16-D, authorizing you to do it. Good to create a papertrail, after all, it's not like anyone here typing in orders would ever quit the company and blow the whistle or anything. And I'll give you a box of marines for doing that. That's better than a raise and job security, right?

Joe: Oh boy, Marines. Showcase is going down!

-----------------------------------------------------------------------------

So, yeah, I'm sceptical of this old, often repeated story.

Well, the US ist NOT the rest of the world.... As soon as a new shop open over here in Germany this 50% stuff happens as a way to celebrate the opening of the shop.

I'd never heard of a 50% off from GW... Here in Oz the 'Grand Opening' sales used to be 30% off, or buy 2 blisters/boxes and get a third free. But that was only for the one day.

On this subject, There is alot of talk, but from referencing its past programs, this one is paltry. The 50% off is from the past, and it is a fact, they used to do it alot, usually as a way to clear out old stock to get ready for the new season. Now I think that its a thing of the past, and at best it will probibly never return, because of the sorry state of GW as a company. The shareholders page, as well as the past analysis tell the real tale.
They can't afford to try to save themselves, even if they wanted to, they are weak in the game to even try to make the attempt.

The talk about the undercutting is true. I have heard it from the shops on different occasions from three different states. New York, North Carolina, and in Virginia each of the shops in turn has either given up a large percentage of space for GW product, or the shop folded completly, in the buisiness of losing sales to a GW store, or a competetor, who did a much better job.
In North Carolina, the information of the subpar delivery is also the addition of the stipulations of a quota system of sales, in that a local retailer has to buy a set batch of the product, and has little choice in having to sell "New" product as part of the order. They have told me that there is a standard of this type of practice in GW, and now they have cut thier orders to the bare minimum, and only gear tword thier customers orders, and as a result, the old GW wall has shrunk to less then a three foot by four foot section of wall.
In New York, The Mall in Syracuse finally aquired a GW store, to the detriment to a certian LGS, and by the way, the store was a steady earner, had more street cred, and had numerous outlets into other game systems as well.
In Virginia, the LGS's wall has as well shrunk, and aside from loosing GW as a steady sell, it is aquiring more and more PP, in its place. The LGS has been steadily loosing ground to its GW store, but in the recent past eight or so months it is appearent to this young gamer that this GW store is in the red zone, and on the verge of being axed in one of GW's " consolidation" routines.

GW has to continue to keep its fatcats happy. You don't do that by not moving product. You need to sell something, or you have to cut costs, in either profits or in prices. Those profits are going to come, either by liquidating assets, or by selling product. Past performance of the GW shareholders page tell the tale, and if they are going to lie to anyone, they really can't lie to themselves.

Each of the game stores has never met the other. They are in different states and there are people in these states that will attest to the facts as well. We could also talk of another esteemed store in relation to this site, but im sure you don't want to pry into the same story different verse.

     GW's supposed card deal is a joke. In the past, they would give away FREE basic boxed games of Fantasy, or 40K.
In another deal...You buy a basic boxed set, paint up and bring in the contents, we give you a stamp and when you fill the card..., we will give you a choice of a Free Regiment boxed set.
In the Skulls program... you bought such ands such for five ten fifteen twenty skulls... you got a choice of a prize, and it wasn't just some trinket. They even gave out free stuff at grand openings of the GW stores that were much better then the stuff coming out on the supposed Call to Arms.

For first hand info, go ask some of your LGS,s if it isn't along the same lines. I got it from three different states, go see what you can see and come back here and post it.
If you want references, go back to your old white dwarf mags.

(Pdg 77 of White Dwarf 249 has a nice picture, by the way...)

Posted By General Hobbs on 01/28/2007 7:44 PM

 Finally....how would YOU feel if your boss came in and said, "Johnson, can we have a discount on your salary for the next couple of years? Say 20%? Thanks." Would you go for it?

 

Actually, the boss would most likely say, "Johnson, we need you to work this weekend, and since you are a salaried employee and don't punch a timecard, you won't make any extra money. And if you don't your year end review won't go so well."

Or, my favorite: "What can we do to get this done before next week?"

For first hand info, go ask some of your LGS,s if it isn't along the same lines. I got it from three different states, go see what you can see and come back here and post it.
If you want references, go back to your old white dwarf mags.

I do just that, on a regular basis. Gamers talk to other gamers, and on message boards. Retailers talk to other retailers, and have private, retailer only, message boards.

The problem with a lot of these stories, is that while they might have a bit of truth to them, they have also been passed down several tiers, and garbled to the point that they aren't even close to the truth, just as anything that gets passed down that many times does.